China seeks to play down Google threat

China on Friday sought to play down a threat by Google to quit the country on hacking and censorship concerns, saying any decision by the internet search giant would not affect US trade ties.

The United States said it was too soon to tell how economic ties would be affected, but added free information flow was crucial to China's maturing economy.

A spokesman for China's Commerce Ministry said there were many ways to resolve the Google issue, but repeated that all foreign companies, Google included, must abide by Chinese laws.

The issue risks becoming another irritant in China's relationship with the United States, already strained by arguments over the Chinese currency's exchange rate, trade protectionism and U.S. arms sales to Taiwan.

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The United States has backed Google's decision to no longer support China's censoring of Internet searches, and has raised the issue at a diplomatic level.

"It seems to me that the principles that Google is trying to uphold are not just important in a moral or rights framework, but are also of very considerable economic importance," senior White Senior White House economic adviser Lawrence Summers said.

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When asked if the dispute with Google would mark a turning point in the US economic relationship with China, Summers replied, "I think it's too early to assess what all of the effects will be."

Playing down the concerns raised by rival Google, Microsoft said it had no plan to pull out of China.

"I don't understand how that helps anything. I don't understand how that helps us and I don't understand how that helps China," said Steve Ballmer, CEO of the world's largest software maker.

Microsoft has high hopes for its Bing internet search engine in China, which has only a small share of the market, but could benefit if Google, the No. 2 player behind dominating local rival Baidu, pulls out.

Political levelBallmer's comments run counter to broad political support for Google. US Deputy Assistant Secretary for East Asian and Pacific Affairs David Shear met a Chinese diplomat in Washington on Thursday to seek an explanation about the cyber-attacks and censorship, State Department spokesman P.J. Crowley said.

"The incident raises questions about both internet freedom and the security of the internet in China," Crowley said.

"We have serious concerns about this and its ramifications, and we're going to continue our dialogue with China on these and other kinds of issues," he said.

A senior US official said Shear received no reply from the Chinese on the Google case.

China has defended its censorship, and Chinese media are stressing that foreigners must abide by Chinese laws.

Most of the filters on Google.cn were still in place on Friday, though controls over some searches, including the June 4, 1989 Tiananmen crackdown, appear to have been loosened.

"According to local laws, rules and policies, some search results cannot be shown," reads a message in Chinese following sensitive search topics, a line Google.cn used for years.

Google, which has said it hopes to work with China to establish an unfiltered search engine in that market, confirmed it was still censoring results on Google.cn.

Flaw in IE browserGoogle said on Tuesday that in mid-December, it detected an attack on its corporate infrastructure originating from China that resulted in the theft of its intellectual property. It said that more than 20 other companies had been infiltrated, although cyber experts say 34 firms were attacked.

Security firm McAfee said that the recent cyber-attacks on Google and other businesses exploited a previously unknown flaw in Microsoft's Internet Explorer browser.

McAfee said employees of the companies were tricked into clicking on a link to a website that secretly downloaded sophisticated malicious software onto their PCs through a campaign that the hackers apparently dubbed "Operation Aurora".

"We have never seen attacks of this sophistication in the commercial space. We have previously only seen them in the government space," said Dmitri Alperovitch, a vice-president of research with McAfee.

Microsoft later sent out an advisory to help users mitigate the problem. It is still working on a patch that would solve it.

But Microsoft's CEO downplayed the hacking attacks.

"There are attacks every day. I don't think there was anything unusual, so I don't understand," Ballmer said. "We're attacked every day from all parts of the world and I think everybody else is too. We didn't see anything out of the ordinary."